Question text Calculating Depletion, Depreciation, and Ending Inventory Aerial Company acquired land containing natural resources that it planned to extract for $2 5 million on January 1, 2020 The amount allocated to the land is $100,000 Surveys estimate that the recoverable reserves will total 2 million tons The company paid an additional $200,000 for development to prepare for the extraction of the resources The company also incurred $100,000 to build roads with a useful life of 8 years The roads will not be used for other projects The company is obligated to restore the site after the extraction of resources The present value of this obligation is $25,000 240,000 tons of natural resources were extracted in 2020 and 225,000 tons were sold in 2020 Required a Determine depletion for the natural resource in 2020 Note Round depletion rates to two decimals used in your calculations $Answer b Assuming that the company depreciates the cost of roads using units of production, determine depreciation expense for 2020 Note Do not round until your final answer Round your final answer to the nearest dollar $Answer c Compute cost of goods sold for 2020, and ending inventory on December 31, 2020 Note Round depletion rates to two decimals used in your calculations Cost of goods sold $Answer Ending inventory $Answer Calculating Depletion, Depreciation, and Ending Inventory Aerial Company acquired land containing natural resources that it planned to extract for $2 5 million on January 1, 2020 The amount allocated to the land is $100,000 Surveys estimate that the recoverable reserves will total 2 million tons The company paid an additional $200,000 for development to prepare for the extraction of the resources The company also incurred $100,000 to build roads with a useful life of 8 years The roads will not be used for other projects The company is obligated to restore the site after the extraction of resources The present value of this obligation is $25,000 240,000 tons of natural resources were extracted in 2020 and 225,000 tons were sold in 2020 Required a Determine depletion for the natural resource in 2020 Note Round depletion rates to two decimals used in your calculations $ b Assuming that the company depreciates the cost of roads using units of production, determine depreciation expense for 2020 Note Do not round until your final answer Round your final answer to the nearest dollar $ c Compute cost of goods sold for 2020, and ending inventory on December 31, 2020 Note Round depletion rates to two decimals used in your calculations Cost of goods sold $ Ending inventory

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Question text Calculating Depletion, Depreciation, and Ending Inventory Aerial Company acquired land containing natural resources that it planned to extract for $2.5 million on January

Question text

Calculating Depletion, Depreciation, and Ending Inventory

Aerial Company acquired land containing natural resources that it planned to extract for $2.5 million on January 1, 2020. The amount allocated to the land is $100,000. Surveys estimate that the recoverable reserves will total 2 million tons. The company paid an additional $200,000 for development to prepare for the extraction of the resources. The company also incurred $100,000 to build roads with a useful life of 8 years. The roads will not be used for other projects. The company is obligated to restore the site after the extraction of resources. The present value of this obligation is $25,000. 240,000 tons of natural resources were extracted in 2020 and 225,000 tons were sold in 2020.

Required

a. Determine depletion for the natural resource in 2020. Note: Round depletion rates to two decimals used in your calculations. $Answer

b. Assuming that the company depreciates the cost of roads using units-of-production, determine depreciation expense for 2020. Note: Do not round until your final answer. Round your final answer to the nearest dollar. $Answer

c. Compute cost of goods sold for 2020, and ending inventory on December 31, 2020. Note: Round depletion rates to two decimals used in your calculations. Cost of goods sold $Answer Ending inventory $Answer

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Calculating Depletion, Depreciation, and Ending Inventory Aerial Company acquired land containing natural resources that it planned to extract for $2.5 million on January 1, 2020. The amount allocated to the land is $100,000. Surveys estimate that the recoverable reserves will total 2 million tons. The company paid an additional $200,000 for development to prepare for the extraction of the resources. The company also incurred $100,000 to build roads with a useful life of 8 years. The roads will not be used for other projects. The company is obligated to restore the site after the extraction of resources. The present value of this obligation is $25,000.240,000 tons of natural resources were extracted in 2020 and 225,000 tons were sold in 2020. Required a. Determine depletion for the natural resource in 2020. Note: Round depletion rates to two decimals used in your calculations. $ b. Assuming that the company depreciates the cost of roads using units-of-production, determine depreciation expense for 2020. Note: Do not round until your final answer. Round your final answer to the nearest dollar. $ c. Compute cost of goods sold for 2020, and ending inventory on December 31, 2020. Note: Round depletion rates to two decimals used in your calculations. Cost of goods sold $ Ending inventory